The Pace of Technology

Tag Archives: Coca-Cola

A new generation of consumers demand sustainability. In response, multinational corporations are increasingly integrating bio-based materials and chemicals into products as a way to market a more sustainable brand. Business savvy leaders will first target opportunities where bio-based materials & chemicals have a clear advantage over incumbents in performance, but most are stumped by where to start in the value chain. Continue reading →

Bio-based chemicals developer Avantium (client registration required) recently announced that it acquired the IP portfolio and equipment, and recruited two to three full-time research employees, of Liquid Light (client registration required), a company that had previously focused on the electrochemical conversion of CO2 to monoethylene glycol (MEG) and other chemicals. Avantium’s primary technology converts glucose and fructose to furan-2,5-dicarboxylic acid (FDCA). Avantium then combines FDCA with MEG to produce polyethylene furanoate (PEF), a polyester with improved barrier and mechanical properties over polyethylene terephthalate (PET). Given the significance of this announcement, we reached out to Avantium’s CFO Frank Roerink to learn more about the acquisition and its implications on Avantium.Continue reading →

Bio-based materials and chemicals (BBMC) often suffer from a bad reputation, universally thought to be of poorer quality or more expensive than their traditional petroleum-based counterparts. While initial BBMC products like starch-based plastics were inferior substitutes that didn’t perform as well as incumbents, in recent years developers have been putting out materials with competitive, and even, superior price-performance characteristics. Continue reading →

Liquid Light recently signed a technology development agreement with The Coca-Cola Company to accelerate the progress of its CO2 to mono-ethylene glycol (MEG) conversion technology. This news follows Coca-Cola’s recent unveiling of its first PET plastic bottle made completely from plant materials.

With this announcement, Liquid Light joins Virent, Gevo, and Avantium on the Coca-Cola PlantBottle project. Gevo focuses on developing bio-PX as a precursor to bio-TPA, Avantium looks into FDCA for polyethylene furanoate (PEF), while Virent focuses on developing an alternative route to bio-PX for the (client registration required) production of bio-PET. Liquid Light aims to produce ethylene glycol from CO2, which would further augment Coca-Cola’s existing PlantBottle Packaging Program when the Liquid Light technology converts biogenic carbon sources.

But if Coca-Cola can already produce 100% bio-based PET, why did the company just sign this agreement with Liquid Light? Now that Coca-Cola has achieved its 100% bio-based PlantBottle, the company wants to implement the exclusive use of this bottle by 2020. However, it will not be able to do this on a global commercial scale while remaining cost competitive with (client registration required) petroleum derived alternatives. This is where Liquid light comes into play. The company claims its route to be a lower cost alternative to the ethanol to MEG route used to produce the bio-MEG in Coca-Cola’s PlantBottles today.

When we spoke with the company last year, we were told of a hypothetical model where a Liquid Light MEG facility would be an alternative to the Quest CCS Project, which plans to bury 1 million tons of CO2 per year underground. In this scenario, a Liquid Light facility would use the 1 million tons per year of CO2 to produce around 625,000 tons per year of ethylene glycol. Assuming a cost of carbon dioxide of $77/ton and a 10% discount rate, the company projected operational expenses of $402 million per year, which translates to approximately $640 per MT of MEG. Current selling prices for commercial volumes of MEG range from roughly $800 per MT to $1,000 per MT, thereby potentially leaving enough margin to compete on price parity with incumbents. If Liquid Light is able to achieve its cost claims, this gives Coca-Cola the ability to kill two birds with one stone: expanding its options for sourcing bio-MEG, while also obtaining it at a price on par, or even lower, than incumbents.

With its recent flurry of bio-PET announcements, Coca-Cola is becoming a leader in developing and implementing bio-based alternatives into its product portfolio; however, we are seeing other companies follow suit. For instance, (client registration required) LEGO’s recent sustainability announcement emphasizes the vast amounts of time and money companies are willing to invest in order to go green. Announcements like this emphasize the growing opportunities for companies looking to address sustainability concerns in existing value chains.

Droughts have plagued North America cutting corn output to a 16-year low, while monsoon rainfall has been 12% lighter in areas of India and even more in other regions. But in Brazil, even though excessive rains pushed harvesting back, the 2012 yield still rose to 571 million metric tons. Estimates peg next year’s crops as being bigger than ever, due to the same unusually rainy conditions. The harvest season ending in 2010 saw yields of 541 million, and in 2011 yields grew slightly, to 557 million metric tons. But next year’s yield is being forecast to be even larger – 5.4% larger – at 602 million metric tons.

Also in Brazil, Coca-Cola contracted JBF Industries to produce ethylene glycol in Araraquara, Sao Paulo, for partially bio-based PlantBottle PET. JBF will build a new plant starting at the end of 2012 and will produce 500,000 metric tons/year; it will take two years to complete.

But aside from the feedstock and materials developments, there’s money flowing, too, in Brazil. Brazilian national development bank, BNDES, and research-financing agency, Finep, have earmarked $988 million for bio-based chemicals and biofuels investment to be placed this year ($148 million), 2013 ($345 million), and 2014 ($493 million). They emphasize only “several projects” will be pursued. Dow Chemical, Braskem, and DuPont each passed the initial selection phase for their proposals to build projects collectively worth more than $1.5 billion. DSM has already been approved to receive funding for succinic acid from sugarcane. Previously, the two organizations contributed $493 million to research on cellulosic ethanol production, gasification, and other value-added derivatives of sugarcane.

For any that doubt, Brazil’s sugarcane continues to put it on the map of bio-based chemicals and biofuels production hotspots, although a recent conversation highlighted that, ironically, corn was less exposed to food price increases than sugarcane, since sugarcane prices track with sugar, a commodity more tightly linked to food price trends than corn, which is largely used for feed and ethanol. Brazilian government support for sugarcane production and downstream conversion activities is strong, and the Brazilian bio-chemical industry has a reputation for translating technology into commercial successes well. Whether it be to keep tabs on a formidable competitor or to understand the landscape in Brazil to explore forming a valuable partnership to secure feedstock or to access sugarcane-derived material, clients are advised to monitor Brazil’s sugarcane harvest and consider it when making decisions about feedstock supply. Though this year’s droughts are not expected to repeat next year, contingency plans for less likely – and even more unlikely events – are advised, as volatility in weather yields volatility in crop yields.

Last week, industry giants Coca-Cola, Ford Motor, Heinz, Nike, and Proctor & Gamble formed a partnership agreement designed to integrate 100% plant-based polyethylene terepthalate (PET) into their product lines at commercial scale. This news rides on the coattails of Coca-Cola’s announcement to partner with Virent, Gevo (Client registration required.), and Avantium (Client registration required.) to accelerate development of their current 30% plant-based monoethylene glycol (MEG) PlantBottle (Client registration required.). To date, purely bio-based PET technologies exist. In fact, there are many plant-based routes to terepthalic acid (TPA), which can then be converted to PET. These include both fermentation and catalytic processes that are currently too expensive at commercial scale.

Coca-Cola’s goal is to convert all petroleum-based PET products to plant-based PET, which represents 52% of the total packaging within the company. Heinz licensed the MEG PlantBottle technology from Coca-Cola, and hopes to achieve similar goals. Furthermore, Ford shifted from using petroleum-based PET to currently use 25% soy-based polyols for seat cushions, recycled resins for underbody systems, post-industrial recycled yarns for seat fabrics, and repurposed nylon to make cylinder head covers in its bio-based portfolio. Considered a drop-in solution, bio-based PET replicates the mechanical and chemical properties of petroleum-based PET. Therefore, the 100% plant-based PET can potentially be used for all of these end products.

This consortium acts as a catalyst to grow the bio-based PET industry to produce plastic bottles, clothing, shoes, automotive carpets, and other furnishings, and essentially any product made from traditional PET. These industry behemoths will inevitably commercialize the technology due to their current R&D partnerships, access to suppliers, collaborations with universities, and extensive monetary resources. Furthermore, this will enhance the strength of the bio-based materials and chemicals industry by promoting collaboration along the entire supply chain, especially as the rate of forged partnerships is expected to slow in 2012. (See the report “Solving the Bio-Based Chemicals Partnership Puzzle.” Client registration required.)